Market Update - Bourne Partners

Q2 2018

CMO ? Transaction Comps

USD in millions, except for per-share amounts

Announced Date

Target

Jul-18

Juniper Pharmaceuticals

Sep-17

Cook Pharmica LLC

CMO Transaction Comps

Target Description

Diversified healthcare company that focuses on developing novel intra-vaginal therapeutics that address unmet medical needs in women's health

Buyer

Catalent Pharma Solutions, Inc.

Provides contract development and manufacturing services to Catalent Pharma

pharmaceutical and biopharmaceutical companies

Solutions, Inc.

Geographic Location

Enterprise Value

LTM Revenue LTM EBITDA

EV / LTM Revenue

USA

$121.9

$54.3

$1.7

2.2x

EV / LTM EBITDA

NM

USA

950.0

177.8

NA

5.3x

NA

Jun-17

Albany Molecular Research, Inc.

Contract research and manufacturing company that provides integrated drug discovery, development, and manufacturing

The Carlyle Group L.P.

USA

1,593.5

628.7

71.8

2.5x

22.2x

May-17

Patheon N.V.

Provides outsourced pharmaceutical development and manufacturing services

Thermo Fisher

USA

7,205.3

1,933.0

351.2

3.7x

20.5x

Dec-16

CMC Biologics

Provides contract process development and biopharmaceuticals manufacturing services

Asahi Glass Co., Ltd.

Denmark

514.3

NA

NA

NA

NA

Dec-16

Capsugel, Inc.

Develops dosage forms and solutions for the healthcare industry around the world

Lonza Group Ltd.

USA

5,500.0

1,000.0

344.0

5.5x

16.0x

Sep-16

PharmaCore, Inc.

Specializes in developing, manufacturing, and scaling up APIs for clinical phase projects

Cambrex Corporation

USA

25.0

17.0

2.0

1.5x

12.5x

Aug-16

Ash Stevens, Inc.

Develops and manufactures drug substances and APIs

Piramal Pharma Solutions Inc.

USA

53.0

18.3

NA

2.9x

NA

Jul-16

Gland Pharma Limited

Manufactures small volume parenterals including vials, ampoules, pre-filled syringes, and lyophilized vials

Fosun Pharma Industrial Pte. Ltd.

India

1,588.6

188.2

NA

8.4x

NA

May-16

Euticals S.p.a.

Manufactures and sells APIs, customs synthesis, and fine chemical products

Albany Molecular Research, Inc.

Italy

353.1

243.1

26.8

1.5x

13.2x

Notes: NA - Not Available NM - Not Meaningful

Source: S&P Capital IQ, July 3, 2018

Median Mean High Low

$433.7 1,519.0 7,205.3

25.0

$188.2 406.1

1,933.0 13.1

$26.8 118.3 351.2

2.0

3.2x

16.0x

3.6x

16.6x

8.4x

22.2x

1.4x

11.2x

CRO ? Transaction Comps

USD in millions, except for per share amounts

Announced Date

Target

Mar-18

Accelovance, Inc.

CRO Transaction Comps

Target Description

Full-service, clinical CRO that focuses on oncology, vaccines, and general medicine

Buyer Linical USA, Inc.

Geographic Location

Enterprise Value

LTM Revenue LTM EBITDA

EV / LTM Revenue

USA

$32.9

$26.8

NA

1.2x

EV / LTM EBITDA

NA

Feb-18

MPI Research Inc.

Provides preclinical and early clinical contract research services

Charles River Laboratories International, Inc.

USA

800.0

240.0

$68.4

3.3x

11.7x

Sep-17

Optimal Research

SMO providing solutions to CROs, pharmaceutical, biotechnology, and medical device companies

Synexus Limited

USA

NA

NA

NA

NA

NA

Jul-17

MAPI Development SAS

Non-clinical contract research organization that provides mission-critical research services and products

ICON Public Limited Company

France

139.5

NA

NA

NA

NA

Jul-17

Chiltern International Limited

Contract research organization that provides clinical development, scientific services, and collaborative technologies

Covance Inc.

UK

1,200.0

NA

NA

NA

NA

Jun-17

PAREXEL International Corporation

Outsourcing services company that provides clinical research , Pamplona Capital

consulting, and commercialization

Management LLP

USA

5,007.4

2,097.0

342.8

2.4x

14.6x

May-17

inVentiv Health

Custom synthesis/contract research organiztion

INC Research Holdings, Inc.

USA

4,513.7

2,177.4

292.7

2.1x

15.4x

Sep-16

ExecuPharm Inc.

Offers CRO support services including clinical trial management, monitoring, and site management

PAREXEL International Corporation

USA

155.0

NA

NA

NA

NA

May-16

IMS Health Holdings, Inc.

Provides information and technology services to healthcare industry worldwide

Quintiles Transnational Holdings Inc.

USA

13,266.8

3,063.0

743.0

4.3x

17.9x

May-16

Synexus Limited

Engages in the identification, recruitment, and retention of patients for clinical trials on behalf of sponsors

Pharmaceutical Product Development, LLC

UK

257.8

68.8

15.9

3.7x

16.2x

Notes: NA - Not Available NM - Not Meaningful

Source: S&P Capital IQ, July 3, 2018

Median Mean High Low

$800.0 2,819.2 13,266.8

32.9

$1,168.5 1,278.8 3,063.0 26.8

$292.7 292.6 743.0 15.9

2.9x

15.4x

2.9x

15.2x

4.3x

17.9x

1.2x

11.7x

Distribution ? Transaction Comps

USD in millions, except for per-share amounts

Announced Date

Target

Nov-17

H. D. Smith, LLC

Pharma Distribution Transaction Comps

Target Description

Distributes and supplies healthcare products and business solutions to manufacturers and healthcare providers

Buyer

AmerisourceBergen Corporation

Geographic Location

Enterprise Value

LTM Revenue LTM EBITDA

EV / LTM Revenue

USA

$815.0

NA

NA

NA

EV / LTM EBITDA

NA

Nov-17 Mar-17 Aug-16

Cardinal Health (L) Co., Ltd. Pelion S.A. Anda, Inc.

Distributes pharmaceutical products, medical devices, and specialty pharmaceuticals to pharmacies and hospitals

Shanghai Pharma Century Global Limited

Engages in the trade of pharmaceuticals, cosmetics, and parapharmaceuticals operating through wholesale, retail, services, and other segments

Korporacja Inwestycyjna Polskiej Farmacji Sp. z o.o.

Distributes generic, branded, specialty, and over-the-counter pharmaceutical products

Teva Pharmaceutical Industries Limited

Malaysia Poland USA

557.0

$3,845.7

323.4

2,399.5

500.0

NA

$83.3 31.5 NA

0.1x

6.7x

0.1x

10.3x

NA

NA

Jul-16

Pharmapar Inc.

Distributes generics drugs for privately insured individuals offering a range of medication types

AlliancePharma Inc. (nka:KDA Group Inc.)

Canada

11.1

17.3

NA

0.6x

NA

May-16

Symmetry Surgical, Inc.

Mar-16

Rexall Pharma Plus Ltd.

Apr-15

Idis Group Holdings Ltd.

Manufactures and distributes medical devices worldwide

RoundTable Healthcare Partners IV, L.P

Operates a network of retail pharmacy stores in Canada offering prescription centers that focus primarily on prescription and over-the-counter products

McKesson Canada Corporation

Provides access to unlicensed pharmaceutical products internationally

Clinigen Group Plc

USA Canada

UK

129.5 2,154.3

341.4

84.1 2,000.0

274.5

9.1 200.0

19.0

1.5x

14.2x

1.1x

11.1x

1.2x

18.0x

Feb-15

BioRx, LLC

Distributes specialty pharmaceuticals and medical supplies, and provides infusion services in the United States

Diplomat Pharmacy, Inc.

USA

347.8

227.0

23.0

1.5x

15.1x

Jan-15

Norchem Ltd.

Distributes and markets pharmaceuticals

Lexon (UK) Limited

UK

34.9

37.9

NA

0.9x

NA

Notes: NA - Not Available NM - Not Meaningful

Source: S&P Capital IQ, July 3, 2018

Median Mean High Low

$344.6 521.4

2,154.3 11.1

$250.7 1,110.8 3,845.7

17.3

$27.2 61.0

200.0 9.1

1.0x

12.7x

0.9x

12.6x

1.5x

18.0x

0.1x

6.7x

CMO ? Trading Comps

USD in millions, except for per-share amounts 6/30/2018

Company

Ticker

Bachem Holding AG Balchem Corporation Cambrex Corporation Catalent, Inc. Consort Medical plc Jubilant Life Sciences Limited Koninklijke DSM N.V. Lonza Group Ltd Recipharm AB (publ) Siegfried Holding AG Teligent, Inc. West Pharmaceutical Services, Inc.

SWX:BANB NasdaqGS:BCPC NYSE:CBM NYSE:CTLT LSE:CSRT BSE:530019 ENXTAM:DSM SWX:LONN OM:RECI B SWX:SFZN NasdaqGS:TLGT NYSE:WST

Company

Bachem Holding AG Balchem Corporation Cambrex Corporation Catalent, Inc. Consort Medical plc Jubilant Life Sciences Limited Koninklijke DSM N.V. Lonza Group Ltd Recipharm AB (publ) Siegfried Holding AG Teligent, Inc. West Pharmaceutical Services, Inc.

Ticker

SWX:BANB NasdaqGS:BCPC NYSE:CBM NYSE:CTLT LSE:CSRT BSE:530019 ENXTAM:DSM SWX:LONN OM:RECI B SWX:SFZN NasdaqGS:TLGT NYSE:WST

* All estimates from Capital IQ Debt calculations only included for entities with debt NA - Not Available NM - not meaningful

CMO - Trading Comps

Share Price

Shares Out

Equity Value

Net Debt (Cash)

Total Debt

Enterprise Value

Sales

EBITDA

LTM EBIT

EPS

Interest Expense

NTM Forecast

Sales

EBITDA

EPS

NTM YoY Growth

Sales

EBITDA

Book Value

Dividend /share

$131.7 98.1 52.3 41.9 15.7 10.2

100.5 265.2

15.0 399.1

3.5 99.3

13.6 32.1 33.0 133.4 49.0 159.3 173.0 74.2 67.3

4.2 53.5 73.6

$1,787.7 3,151.1 1,723.8 5,586.8 770.5 1,623.9

17,387.1 19,690.4

1,007.7 1,671.4

185.2 7,305.5

$79.7 167.6 (187.6) 2,374.9 131.4 454.2 736.7 3,939.2 464.0

67.7 110.8 (1.8)

$97.4 210.3

0.0 2,777.1

160.9 506.0 3,250.0 4,438.9 520.4 102.7 123.6 198.0

Margin Analysis

Data

Gross

FYE

as of

Profit

EBITDA

EBIT

$1,867.3 3,318.7 1,536.2 7,961.7 901.9 2,078.0

18,123.9 23,629.6

1,471.7 1,739.1

296.0 7,303.7

$268.4 618.5 570.7

2,395.0 428.1

1,155.3 10,974.5

5,238.3 665.2 770.1 61.9

1,627.1

$72.9 148.5 177.9 484.6

92.8 218.5 1,781.4 1,289.8

96.3 112.0 (13.1) 335.2

$51.5 104.8 145.7 308.4

57.5 183.5 1,228.3 893.7

37.3 61.9 (18.0) 235.4

$2.3 1.78 2.71 0.83 0.67 0.59 2.54 6.72 0.11 9.08 (0.18) 2.05

Sales

Enterprise Value/

NTM

EBITDA

EBIT

Sales

NTM EBITDA

$0.3

$296.6

$82.2

$3.6

10.5%

12.8%

$28.3

$2.8

7.6

661.1

162.3

3.0

6.9%

9.3%

19.9

0.4

1.1

556.1

153.1

3.1

(2.6%)

(13.9%)

18.0

NA

104.0 2,581.2

589.0

1.8

7.8%

21.5%

8.0

NA

4.4

426.8

78.5

0.9

(0.3%)

(15.4%)

6.9

0.3

43.7 1,297.6

268.7

0.9

12.3%

22.9%

4.0

0.0

131.8 10,808.1

2,081.4

5.9

(1.5%)

16.8%

50.9

2.3

77.0 6,045.1

1,558.1

11.9

15.4%

20.8%

85.8

2.8

15.1

693.6

109.9

0.4

4.3%

14.0%

8.9

NA

3.8

810.8

136.7

16.1

5.3%

22.0%

166.8

2.5

11.5

81.6

6.8

(0.0)

31.7% (152.4%)

0.8

NA

7.6 1,765.8

387.7

2.9

8.5%

15.7%

17.7

0.5

LTM

P/E NTM

Forecast

Enterprise Value

Debt/ Equity Value

EBITDA

Interest Coverage

Price to Book

Dividend %

31-Dec 30-Jun-18 31-Dec 30-Jun-18 31-Dec 30-Jun-18 30-Jun 30-Jun-18 30-Apr 30-Jun-18 31-Mar 30-Jun-18 31-Dec 30-Jun-18 31-Dec 30-Jun-18 31-Dec 30-Jun-18 31-Dec 30-Jun-18 31-Dec 30-Jun-18 31-Dec 30-Jun-18

31.6% 31.7% 41.0% 30.7% 22.0% 56.2% 36.0% 38.2% 68.3% 18.5%

4.5% 31.5%

27.1% 24.0% 31.2% 20.2% 21.7% 18.9% 16.2% 24.6% 14.5% 14.5%

NM 20.6%

19.2% 16.9% 25.5% 12.9% 13.4% 15.9% 11.2% 17.1%

5.6% 8.0%

NM 14.5%

7.0 x 5.4 x 2.7 x 3.3 x 2.1 x 1.8 x 1.7 x 4.5 x 2.2 x 2.3 x 4.8 x 4.5 x

25.6 x 22.4 x

8.6 x 16.4 x

9.7 x 9.5 x 10.2 x 18.3 x 15.3 x 15.5 x

NM 21.8 x

36.3 x 31.7 x 10.5 x 25.8 x 15.7 x 11.3 x 14.8 x 26.4 x 39.4 x 28.1 x

NM 31.0 x

6.3 x 5.0 x 2.8 x 3.1 x 2.1 x 1.6 x 1.7 x 3.9 x 2.1 x 2.1 x 3.6 x 4.1 x

22.7 x 20.4 x 10.0 x 13.5 x 11.5 x

7.7 x 8.7 x 15.2 x 13.4 x 12.7 x 43.2 x 18.8 x

58.1 x 55.1 x 19.3 x 50.2 x 23.3 x 17.2 x 39.6 x 39.5 x

NM 43.9 x

NM 48.5 x

36.4 x 32.9 x 17.1 x 23.6 x 17.4 x 11.5 x 17.0 x 22.2 x 35.9 x 24.8 x

NM 33.8 x

5.2% 6.3% 0.0% 34.9% 17.8% 24.3% 17.9% 18.8% 35.4% 5.9% 41.8% 2.7%

5.4% 6.7% 0.0% 49.7% 20.9% 31.2% 18.7% 22.5% 51.6% 6.1% 66.7% 2.7%

1.3 x 1.4 x 0.0 x 5.7 x 1.7 x 2.3 x 1.8 x 3.4 x 5.4 x 0.9 x -9.5 x 0.6 x

NM 13.7 x 136.3 x

3.0 x 13.1 x

4.2 x 9.3 x 11.6 x 2.5 x 16.3 x

NM 31.0 x

4.7 x 4.9 x 2.9 x 5.2 x 2.3 x 2.5 x 2.0 x 3.1 x 1.7 x 2.4 x 4.6 x 5.6 x

2.1% 0.4%

NA NA 1.8% 0.5% 2.3% 1.1% NA 0.6% NA 0.5%

Median Mean Min Max

31.7% 34.2%

4.5% 68.3%

20.6% 21.2% 14.5% 31.2%

14.5% 14.6%

5.6% 25.5%

3.0 x 3.5 x 1.7 x 7.0 x

15.5 x 15.8 x

8.6 x 25.6 x

26.4 x 24.6 x 10.5 x 39.4 x

2.9 x 3.2 x 1.6 x 6.3 x

13.5 x 16.5 x

7.7 x 43.2 x

41.8 x 39.5 x 17.2 x 58.1 x

23.6 x 24.8 x 11.5 x 36.4 x

17.9% 17.6%

0.0% 41.8%

19.8% 23.5%

0.0% 66.7%

1.6 x 1.3 x -9.5 x 5.7 x

12.3 x 24.1 x

2.5 x 136.3 x

3.0 x 3.5 x 1.7 x 5.6 x

0.8% 1.2% 0.4% 2.3%

Demand for capacity and the need to differentiate their offerings continues to be a main driver for M&A activity by larger CMOs The median EV multiples for CMOs were 3.0x and 15.5x for Sales and EBITDA, respectively

Source: S&P Capital IQ, June 30, 2018

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